American shoppers are expected to spend more during this holiday shopping season than last year despite economic uncertainty and rising prices.

The 2025 forecast from the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared with last year.

Retailers rung up $976 billion in holiday sales last year, or a 4.3% increase from the prior year, the group said.

“We’re seeing really positive behavior and engagement from consumers, ” NRF President and CEO Matthew Shay told reporters on a call Thursday. “In fairness, that’s been somewhat of a surprise.”

But Shay said more Americans are growing selective and they’re focused on discounts. And while spending is expected to be up again, the growth of that spending may be in decline.

The forecast is still greater than the average increase of 3.6% between 2010 to 2019. Americans ramped up spending after that during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and 12.5% in 2021, according to the NRF.

Holiday spending accounts for 19% of annual sales for the retail industry, though for some retailers the number is a lot higher, according to the NRF. And consumer spending in the U.S. is monitored closely because it drives about 70% of the nation’s gross domestic product.

The forecast this year, however, arrives during the longest government shutdown in U.S. history. There has been no government data released on the jobs market or retail sales since the shutdown began 37 days ago.

Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.

Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31, compared with last year’s 4.2%. Adobe expects U.S. online sales to hit $253.4 billion this holiday season, representing 5.3% growth. That’s smaller than last year’s 8.7% growth.

Consumer spending in the U.S. has remained resilient even as consumer confidence has eroded.

In a separate report this week, Bank of America estimated that U.S. consumers are bearing 50% to 70% of the U.S. tariff costs, and it expects that load to grow.

At the same time, U.S. companies have announced tens of thousands of job cuts. Some companies have cited rising operational costs from new tariffs under the Trump administration, as well as shifting consumer spending, corporate restructuring, or increased spending on artificial intelligence. That has led retailers to pull back on the hiring of seasonal workers.

— Associated Press

Mortgage rates

Averages do U-Turn from recent declines

The average rate on a 30-year U.S. mortgage ticked up for the first time in five weeks after falling to its lowest level in more than a year last week.

The average long-term mortgage rate moved up to 6.22% from 6.17% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.79%.

Last week’s average rate the lowest since Oct. 3, 2024, when it was 6.12%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. The average rate rose to 5.5% from 5.41% last week. A year ago, it was 6%, Freddie Mac said.

Gambling

ESPN inks betting deal with DraftKings

ESPN has reached a gaming deal with DraftKings to be its exclusive sportsbook and will end its partnership with Penn on Dec. 1.

“Our betting approach has focused on offering an integrated experience within our products,” ESPN Chairman Jimmy Pitaro said Thursday in a statement. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans and grow our ESPN direct-to-consumer business.”

The network and Penn announced they mutually agreed to an early termination of their 10-year agreement that began in August 2023.

Product safety

Peleton recalling 870K exercise bikes

Peloton is recalling nearly 878,000 of its exercise bikes across the U.S. and Canada because the products’ seat posts can break during use, posing fall hazards.

According to notices published by the U.S. Consumer Product Safety Commission and Health Canada on Thursday, the recall covers certain “Peloton Original Series Bike+” units carrying model number PL02.

Peloton has received three reports of seat posts breaking on these bikes in the U.S., two of which resulted in fall injuries.

There’s been no additional incidents in Canada to date.

Both consumer safety watchdogs and Peloton urge owners of these bikes to stop using them and contact the New York-based exercise company for a free seat post replacement.

“The integrity of our products and our Members’ well-being are our top priorities,” a Peloton spokesperson said in an emailed statement — adding that the company would make its redesigned seat post replacements “available to all affected Bike+ users.”

Peloton’s website has information to help determine if your bike is part of the recall and instructions on how to install this new seat post if needed.

— From news services